United Bankers Extensive Report: Growth engine is still gaining momentum

Translation: Original published in Finnish on 3/14/2026 at 8:25 am EET.

UB's investment story has improved significantly in recent years, and it has emerged as a high-quality asset manager. In our view, the long-term earnings growth outlook is very good, but in the short term, the challenging market situation for alternatives throws a spanner in the works. Without strong earnings growth, there is no upside in the stock, but if the forecasts materialize, the return expectation is good. We want to see concrete signs of accelerating earnings growth and reiterate our Reduce recommendation with a target price of EUR 19.0 (was EUR 18.0).

Asset manager focusing on real assets

United Bankers (UB) is a Finnish asset management company that also has minor investment banking operations. The company's long-term strategy has been to focus on growing funds that generate recurring cash flow, especially in alternative investment funds. In fact, the fund capital has grown rapidly historically, and the majority of the company's fees come from funds. In recent years, UB has invested in asset management, and its position in the domestic asset management landscape has strengthened significantly. Although private individuals are the company's key target group, UB has also clearly emerged as a challenger in the institutional segment.

Thanks to strong growth and high performance fees, profitability has risen to a good level. However, the share of performance fees in the result is still very high, and profitability adjusted for performance fees is a clear blemish in the investment story.

Long-term outlook is strong

UB's new sales have weakened over the past two years due to headwinds in alternative investment products. Strong Wealth Management sales have not been able to fill the gap left by alternative funds. UB should be in a position to significantly improve its new sales over the next year as the headwinds finally ease. We note that the company's sales force has strengthened significantly over the past couple of years due to successful recruitments.

We expect the company's new sales to turn to clear growth during 2026, and for growth to accelerate in the coming years. Alternative funds and Wealth Management will be the growth engines. The biggest uncertainty in the forecasts is related to the demand for alternative funds in the short term and the sustainability of performance fees in the longer term. Earnings growth in 2026 is still pending, but it will accelerate significantly from 2027 onwards. Overall, we forecast ~15% p.a. EPS growth for 2025-29.

The share of recurring fees will increase from the current 60% to over 70% by 2029. The share of performance fees in the company's earnings will also decrease from the current level of almost 80% to ~40%. A significant improvement in the earnings mix is critical, as it lowers the risk profile. The dividend stream remains abundant as usual, and we expect the company to continue steadily increasing its dividend. Regarding M&A, we believe UB is actively seeking acquisition targets. Acquisitions would be complementary to UB, and we do not believe UB will be involved in larger industry transactions.

The short-term valuation picture is neutral

All our valuation methods indicate similar results. It is difficult to see upside in the stock based on the realized earnings, but if strong earnings growth materializes, the stock's expected return is good. We note that our forecasts expect significant earnings growth from the company in the coming years, and to achieve this, the company's new sales must rise to the next level. In addition, performance fees must remain at their current excellent level. Thus, the bar is already quite high, especially as valuation multiples have crept upwards and the stock is priced well above its historical levels based on realized earnings. In the short term, it is difficult for us to see upward drivers for the stock, as more robust earnings growth is still pending.